Just in case you’re sick and tired of hearing about COVID-19 and hoping it will one day be over…
The World Health Organization is now warning “this virus may never go away.”
Strangely enough, this new outlook could give investors the opportunity to get in on what could be a $250 billion per year industry.
Why?
It all has to do with the important difference between an epidemic – an outbreak of disease that spreads quickly and affects many individuals at the same time… and an endemic – an infection within a geographic location that is existing perpetually:
Predictability!
According to a recent interview with Graham Medley, PhD, director of the Centre for the Mathematical Modelling of Infectious Diseases at the London School of Hygiene and Tropical Medicine…
For most people, the difference between epidemic disease and endemic disease is that the risks are unknown for an epidemic disease.
We don’t have this kind of government response to the flu every year.
But that’s because public health officials and governments know the risks of the flu. They can predict its patterns and focus on mitigating its impact through education and vaccines.
Now, to be clear, I’m not an infectious disease expert (nor do I play one on TV)…
But as an investor, there are few words I love to hear more than “predictable.”
If you’ve been paying attention to our editorial this month so far, you know that we are very bullish on Telemedicine and Remote Patient Monitoring (and bullish on the whole biotech sector in general)…
And we’re definitely not the only ones…
According to a recent report by McKinsey & Company: “With the acceleration of consumer and provider adoption of telehealth and extension of telehealth beyond virtual urgent care, up to $250 billion of current US healthcare spend could potentially be virtualized”
And perhaps even more important, this sweeping change to the way we “consume” healthcare products could help investors “do good while doing well.”
Here’s why…
For the past 40 years, there’s been a startling trend in the world of healthcare in America.
A massive increase in the number of preventable deaths, thanks to chronic diseases.
Chronic conditions are defined by the Center for Disease Control (CDC) as “conditions that last 1 year or more and require ongoing medical attention or limit activities of daily living or both.”
According to the CDC, six in ten adults in America have some form of chronic disease, and four in ten adults have two or more chronic conditions.
When we look at the Medicare population, these numbers get even more dramatic: Data from the Centers for Medicare and Medicaid Services (CMS) show that over two-thirds of Medicare beneficiaries have two or more chronic conditions.
It’s the leading cause of death and disability, as well as the leading driver of the nation’s $3.7 trillion in annual health care costs.
This is equivalent to 19.6 percent of the U.S. GDP in 2016—in other words, nearly one-fifth of the U.S. economy…
And the problem is only getting worse!
According to The Alliance for Aging Research – the nation’s leading non-profit organization dedicated to supporting and accelerating the pace of medical discoveries to improve the universal human experience of aging and health…
99% of Medicare spending is on behalf of beneficiaries with at least one chronic condition…
And the more chronic conditions they have, the more expensive they are to care for.
According to the RAND Corporation’s study, “Multiple Chronic Conditions in the United States”…
Those with five or more chronic conditions spend twice as much on average as those with three or four conditions…
And a whopping 14-times more than people with no chronic conditions!
Long story short…
People are living longer, and living sicker…
And the rising costs are driving Medicare into insolvency!
If we don’t do something to get control of chronic disease related expenses, it will not only speed up the likely chance of the Medicare Trust being depleted…
But will continue to deepen the already massive Federal Deficit.
However, Medicare is a “sacred cow” in America. Making budget cuts – or reducing coverage – would be potentially devastating for the tens of millions of people who rely on Medicare for their healthcare.
This means the only plausible option for politicians – and America – to address this crisis?
We must innovate!
And the most predictable way to reduce healthcare costs?
We need to focus on prevention – and better management – of chronic conditions.
Sincerely,
Jake Hoffberg – Publisher
Equifund
